5 Stocks Rising on Unusual Volume - views

WINDERMERE, Fla. (Stockpickr) -- Professional traders running mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by “superinvestors.”

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it’s always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Bunge (BG) is a global agribusiness and food company, operating in the farm-to-consumer food chain. It conducts its operations in three divisions: agribusiness, fertilizer and food and ingredients. This stock is trading up 1.3% at $68.51 in recent trading.

Today’s Volume: 1.96 million

Average Volume: 1.15 million

Volume % Change: 276%

From a technical perspective, BG is moving modestly higher here off oversold levels with above-average volume. This stock has been downtrending badly for the last two months, with shares dropping from its high of $76.47 to its intraday low of $66.86. During that move, shares of BG have been consistently making lower highs and lower lows, which is bearish technical price action. That move has pushed shares of BG into oversold territory, since its current relative strength index reading is 28.13. Oversold can always get more oversold, but it’s also an area from which a stock can experience a powerful bounce higher.

Traders should now look for long-biased trades in BG as long as it’s trending above today’s low of $66.86 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 1.15 million shares as bullish. If BG can maintain that strength, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $70 to around $73.

Warner Chilcott

Warner Chilcott (WCRX) is currently focused on the gastroenterology, women's health care, dermatology and urology segments of the North American and Western European pharmaceuticals markets. This stock is trading up 4.1% at $14.09 in recent trading.

Today’s Volume: 3.70 million

Average Volume: 4.59 million

Volume % Change: 50%

From a technical perspective, WCRX is ripping higher here back above its 50-day moving average of $13.77 with decent upside volume flows. This stock has been trending sideways for the last month and change, with shares moving between $13.15 on the downside and $14.14 on the upside. This spike today is quickly pushing shares of WCRX within range of triggering a breakout trade above the upper-end of its recent sideways chart pattern. That trade will hit if WCRX takes out $14.14 with high volume.

Traders should now look for long-biased trades in WCRX as long as it’s trending above its 50-day at $13.77 or above some key near-term support at $13.20, and then once it sustains a move or close above $14.14 to today’s high of $14.15 with volume that hits near or above 4.59 million shares. If that breakout triggers soon, then WCRX will set up to re-test or possibly take out its next major overhead resistance levels at $14.75 to $15.21. Any high-volume move above $15.21 will then put $16 to $17 into range for shares of WCRX.

Lennar

Lennar (LEN), a homebuilder and a provider of financial services, is trading up 3.7% at $40.52 in recent trading.

Today’s Volume: 3.81 million

Average Volume: 4.20 million

Volume % Change: 54%

From a technical perspective, LEN is bouncing higher here right above some near-term support at $37.95 with solid upside volume. This move is quickly pushing shares of LEN within range of triggering a near-term breakout trade. That trade will hit if LEN manages to take out its 50-day moving average of $40.35 with high volume. At last check, LEN has hit an intraday high of $40.78 and volume is very close to surpassing its three-month average of 4.20 million shares.

Traders should now look for long-biased trades in LEN as long as it’s trending above today’s low of $38.78, and then once it sustains a move or close above its 50-day at $40.35 with volume that hits near or above 4.20 million shares. If that breakout hits soon, then LEN will set up to re-test or possibly take out its next major overhead resistance levels at $42 to $43.90.

Huntington Ingalls Industries

Huntington Ingalls Industries (HII) designs, builds, overhauls and repairs ships primarily for the U.S. Navy and the U.S. Coast Guard. This stock is trading up 1.2% at $52.79 in recent trading.

Today’s Volume: 277,000

Average Volume: 276,177

Volume % Change: 50%

From a technical perspective, HII is trending higher here right above some near-term support levels at $51 to $50.41 with above-average volume. This move is quickly pushing shares of HII within range of triggering a near-term breakout trade. That trade will hit if HII manages to take out some near-term overhead resistance levels at $54.16 to $54.22 with high volume.

Traders should now look for long-biased trades in HII as long as it’s trending above today’s low off $52.17 or above $52, and then once it sustains a move or close above those breakout levels with volume that hits near or above 276,177 shares. If that breakout triggers soon, then HII will set up to enter new 52-week-high territory above $54.22, which is bullish technical price action. Some possible upside targets off that breakout are $57 to $60.

Beazer Homes USA

Beazer Homes USA (BZH) designs, sells and builds single-family and multi-family homes in the U.S. This stock is trading up 6.6% to $15.80 in recent trading.

Today’s Volume: 1.39 million

Average Volume: 1.18 million

Volume % Change: 76%

From a technical perspective, BZH is ripping higher here right above some near-term support levels at $14.50 to $14.26 with above-average volume. This stock recently failed right at its 50-day moving average and then pulled back to a low of $14.26. Shares of BZH are now trending higher off that low and quickly moving within range of triggering a near-term breakout trade. That trade will hit if BZH manages to take out its 200-day moving average at $15.99 and then its 50-day moving average at $16.23 with high volume.

Traders should now look for long-biased trades in BZH as long as it’s trending above today’s low of $14.89, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.18 million shares. If that breakout hits soon, then BZH will set up to re-test or possibly take out its next major overhead resistance levels at $16.75 to $17.09. Any high-volume move above those levels will then put $17.75 to $18.50 into range for shares of BZH. .

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.